AbbVie Inc (NYSE:ABBV) and Allergan Plc (NYSE:AGN) have been working on the finer details of their $63 billion merger. The company has come up with an integration plan, and it is planning to keep Allergan’s aesthetic business as an independent unit.
AbbVie to keep Allegan Aesthetics as an independent unit
The Allergan Aesthetics unit will be headquartered in Irvine, Calif. Carrie Strom, the current senior VP medical aesthetic at Allergan, will head the unit. The unit will operate under the AbbVie-Allergan mergers that will be finalized in the first quarter.
According to AbbVie, the unit will market dermal filler Juvederm, cosmetic Botox, and chin-fat-fighter Kybella, among others. AbbVie indicated that it will integrate other Allergan products such as Vraylar and medical Botox into the merger. The deal will benefit AbbVie in that it will receive various drugs such as oral contraceptive Lo Loestrin, bowel syndrome treatments Viberzi and Linzness as well as other proprietary therapies.
The health company expects the merger to boost its bottom line immediately, and they expect full-year earnings per share to increase by 10%. AbbVie is optimistic that once the deal hits peak, it will boost EPS by 20%.
Concerns regarding the integration of Allergan aesthetic business
However, one analyst has expressed concerns regarding how the company will integrate the aesthetics business of Allergan as well as maintain growth in the future. This is because AbbVie faces biosimilar competition for its Humira in 2023.
According to RBC Capital Markets analyst Randall Stanicky, the company should focus on the merger’s six main products. The products include new launches Rinvoq and Skyrizi, cancer fighter Venclexta and Imbruvica, medical Botox, and Orilissa. Randall opines that AbbVie should consider selling Allergan’s aesthetic business.
Richard Gonzalez, the CEO of AbbVie, indicated when they announced the deal that the assets of Allergan could add around $10 billion to $15 billion in revenue. In the process, they will help offset the declining revenue from Humira. Last year in the first nine months, Allergan reported combined sales of around $11 billion.